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  • Halo Electronics, Inc. v. Pulse Electronics, Inc. and Stryker Corp. v. Zimmer, Inc. (2016)

    By Kevin E. Noonan —

    Supreme Court Building #1The aphorism that "[t]he race is not always to the swift nor the battle to the strong, but that's the way to bet," variously attributed to Damon Runyon, Franklin P. Adams, and Hugh Keough, could readily be updated to include that "Federal Circuit opinions are not always overturned by the Supreme Court" because recently that is decidedly the way to bet.  And had anyone bet on the Court reversing (formally, vacating and remanding) the Federal Circuit's In re Seagate Tech. LLC jurisprudence they would have been in the money, because that is just what the Court did today in Halo Electronics, Inc. v. Pulse Electronics, Inc. and a companion case, Stryker Corp. v. Zimmer, Inc.

    To recap, the statute (35 U.S.C. § 284) provides that a district court "may increase the damages [awarded to a patentee against an infringer] up to three times the amount found or assessed."  The Federal Circuit's Seagate test created a two-pronged analysis for deciding willfulness, wherein a district court was instructed to find that infringement occurred "despite an objectively high likelihood" that the accused infringer's actions constituted infringement, as well as a subjective component, that the risk of infringement "was either known or so obvious that it should have been known to the accused infringer."  Moreover, the evidentiary standard under the Seagate test was, for each prong, clear and convincing evidence.  As a consequence, Seagate also provided a "trifurcated" standard of appellate review:  de novo for the objective prong, substantial evidence for the subjective prong, and abuse of discretion for the overall determination of whether willful infringement would lie under particular circumstances.

    Regarding the cases at bar, in Halo a jury found infringement but the District Court refused to award enhanced damages, despite evidence that defendant Pulse knew of the patents (because Halo had written, twice, offering a license), because Halo had not established the objective recklessness prong of the Seagate test.  The Federal Circuit affirmed.  In Stryker, the District Court enhanced a jury award against defendant Zimmer from $76.1 million to over $228 million based on willful infringement.  But the Federal Circuit reversed the enhanced award, holding that Zimmer had asserted "reasonable defenses" at trial and despite a jury finding that Zimmer had "all-but instructed its design team to copy Stryker's products" and had adopted an aggressive stance in competing with Stryker while "opt[ing] to worry about the potential legal consequences later."

    Chief Justice Roberts delivered the opinion of the unanimous Court that swept away these complexities for a simple discretionary standard to be applied by district courts and the Federal Circuit.  The Court' s opinion first focused on the language of the statute itself, wherein a court "may" award enhanced damages but was not required to do so ("we have emphasized that the 'word "may" clearly connotes discretion,'" citing Martin v. Franklin Capital Corp., 546 U. S. 132, 136 (2005) (quoting Fogerty v. Fantasy, Inc., 510 U. S. 517, 533 (1994)).  However, in the very next sentence the opinion cautions that "discretion is not a whim," according to Martin, and that this discretion is dependent on a district court's judgment "guided by sound legal principles."  While eschewing any "precise rule or formula" the Court directs district courts to exercise its discretion "'in light of the considerations' underlying the grant of that discretion," citing Octane Fitness, LLC v. ICON Health & Fitness Inc., 572 U. S. ___, ___ (2014).  The Court emphasizes that enhanced damages should not be "meted out in the typical infringement case" but are warranted only for "egregious infringement behavior" (providing a host of synonyms for such behavior, including "willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or — indeed — characteristic of a pirate").  While acknowledging "180 years" of patent decisions regarding enhanced damages the Court also recognizes that "the channel of discretion ha[s] narrowed," citing Friendly, Indiscretion About Discretion, 31 Emory L.J. 747, 772 (1982), and that enhanced damages "are generally reserved for egregious cases of culpable behavior."

    The Court found precedent for its decision in its case law going back to the beginning of the U.S. patent system, wherein the initial provision of treble damages for all infringement was changed (in the 1836 Patent Act) to be limited to cases of infringement by the "wanton and malicious pirate."  Seymour v. McCormick, 16 How. 480, 488 (1854).  This provision was expressly punitive, and as such not warranted by infringement undertaken in "ignorance or good faith."  This cabining of enhanced damage award to cases of egregious conduct found support in Dean v. Mason, 20 How. 198, 203 (1858) ("aggravated circumstances"), contrasted with unintentional infringement due to ignorance regarding the patent (Hogg v. Emerson, 11 How. 587, 607 (1850).  This limit on enhanced damages was maintained in the 1870 Patent Act as interpreted by the Court, including cases where enhanced damages were justified, Tilghman v. Proctor, 125 U. S. 136, 143–144 (1888); Topliff v. Topliff, 145 U. S. 156, 174 (1892), and those where they were not, Cincinnati Siemens-Lungren Gas Illuminating Co. v. Western Siemens-Lungren Co., 152 U. S. 200, 204 (1894).  The opinion further distinguished apparently contrary precedent as being "not for the ages," Clark v. Wooster, 119 U. S. 322, 326 (1886), or being more properly directed to attorneys' fees awards, which are now the province of Section 285 of the Patent Act, such as Day v. Woodworth, 13 How. 363, 372 (1852), and Teese v. Huntingdon, 23 How. 2, 8–9 (1860).  Finally, the Court found support for its interpretation of Section 284 in earlier cases directed to its proper ambit, such as Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U. S. 476, 505, n. 20 (1964); Dowling v. United States, 473 U. S. 207, 227, n. 19 (1985); and Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. 627, 648, n. 11 (1999).

    With this backdrop, the opinion states that the Seagate test "reflects, in many respects, a sound recognition that enhanced damages are generally appropriate under §284 only in egregious cases."  But, as has so frequently been the case, the Court concludes that the test "is unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts," just as it did in Octane Fitness in 2014.  One example of this rigidity is the Court's apprehension that the test might "insulat[e] some of the worst patent infringers from any liability for enhanced damages"; in the Court's view, the objective prong precluded a finding of willfulness categorically provided that the accused infringer could mount a colorable challenge at trial to a patent's validity or the infringer's non-infringement of it (regardless of whether the infringer appreciated these grounds when commencing infringement) as being one example of this risk.  This "threshold requirement" for finding willfulness liability under the Seagate test "excludes from discretionary punishment many of the most culpable offenders, such as the 'wanton and malicious pirate' who intentionally infringes another's patent — with no doubts about its validity or any notion of a defense — for no purpose other than to steal the patentee's business."  Under these circumstances the Court can see no basis for requiring an "independent showing" of objective recklessness (by clear and convincing evidence no less) in the face of evidence of intentional infringement.  In this regard the Court cites its recent decision in Octane Fitness for the principle that "subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless."  This standard of "knowledge of the actor at the time of the challenged conduct" is also consistent with traditional tort law principles according to the Court.

    Nevertheless, the opinion is also careful to state that merely finding egregious misconduct does not require a district court to award enhanced damages.  The lodestar is discretion, wherein a district court "take[s] into account the particular circumstances of each case in deciding whether to award damages, and in what amount."

    The opinion also disagrees with the Federal Circuit's clear and convincing evidence standard for recklessness, finding no basis in the statutory language (and particularly with reference to other statutory provisions that recite the clear and convincing evidentiary standard).

    Finally, consistent with its rejection of the Seagate test, the opinion also rejects the Federal Circuit's "tripartite" nature of appellate review.  The proper standard is abuse of discretion, following the Court's similar rejection of multipart standards of review in Highmark Inc. v. Allcare Health Management System, Inc., 572 U. S. ___ (2014).  And while the Court recognizes the Federal Circuit's concerns ("The appellate review framework adopted by the Federal Circuit reflects a concern that district courts may award enhanced damages too readily, and distort the balance between the protection of patent rights and the interest in technological innovation") the Court also believes that "[n]early two centuries of exercising discretion in awarding enhanced damages in patent cases [] has given substance to the notion that there are limits to that discretion."

    With regard to the concerns of Respondents and certain amici, that "allowing district courts unlimited discretion to award up to treble damages in infringement cases will impede innovation as companies steer well clear of any possible interference with patent rights," particularly from the dreaded "trolls," the Court acknowledges the risk that the "careful balance" between the need for patents to promote innovation and the importance of encouraging "imitation and refinement" could be disrupted "if enhanced damages are awarded in garden-variety cases."  But "they should not be," says the Court, providing the most certain instruction to district courts and limitations of enhanced damages awards that the Court believes to be consistent with traditional application of the statute.

    Justice Breyer concurred, in an opinion joined by Justices Kennedy and Alito.  The concurrence gave voice to Justice Breyer's well-worn concerns regarding the burden on innovation occasioned by the need for due diligence in the form of a clearance opinion, bolstered by several amici who would rather not be bothered by patenting in the first place.  One particular concern for the concurring Justices is that the Court's opinion should not be taken by district courts to mean willful misconduct can be established by knowledge of the patent "and nothing more."  In this regard the concurrence stresses the "context" of the behavior as contributing to its characterization as "willful" or "wanton":

    I describe these limitations on enhanced damages awards for a reason.  Patent infringement, of course, is a highly undesirable and unlawful activity.  But stopping infringement is a means to patent law's ends.  Through a complex system of incentive-based laws, patent law helps to encourage the development of, disseminate knowledge about, and permit others to benefit from useful inventions.  Enhanced damages have a role to play in achieving those objectives, but, as described above, that role is limited.

    Once again Justice Breyer resorts to the balance between the "helpfulness" of an opinion of counsel to "help draw the line between infringing and noninfringing uses" and "the costs and consequent risk of discouraging lawful innovation," concerns accentuated by several amici.  Also of concern is the "troll" question, with the Justice citing the practice of using patents to obtain licensing fees (and, curiously citing Thomas Jefferson regarding "the abuse of frivolous patents").  The Justice draws the conclusion, assuming that letters offering licenses are somehow an abuse of the patent system, that "[t]he more that businesses, laboratories, hospitals, and individuals adopt this approach, the more often a patent will reach beyond its lawful scope to discourage lawful activity, and the more often patent-related demands will frustrate, rather than 'promote," the "Progress of Science and useful Arts'" (in rhetoric thus "begging the question").

    As for the majority opinion, to some degree the Court has made less burdensome a patentee's task of establishing willful infringement, by lowering the evidentiary standard ("patent-infringement litigation has always been governed by a preponderance of the evidence standard"; Octane Fitness) and by eliminating the "high bar" of establishing objective recklessness.  However the Court was just as adamant that enhanced damages should not be available for "garden-variety infringement" and thus the Federal Circuit's Seagate standard as been supplanted (as in so many other areas of the patent law) by a much less defined, "totality of the circumstances" test.  While Justice Breyer may admonish the Federal Circuit to "take advantage of its own experience and expertise in patent law" in reviewing a district court's performance in awarding enhanced damages, it will be interesting to see the extent to which the Court is willing to give credence to the Federal Circuit in doing so.

    Halo Electronics, Inc. v. Pulse Electronics, Inc. and Stryker Corp. v. Zimmer, Inc. (2016)
    Opinion by Chief Justice Roberts; concurring opinion by Justice Breyer, joined by Justices Kennedy and Alito

  • Colombian Organizations Send Letter to CEWG Regarding Imatinib Compulsory License

    By Donald Zuhn –-

    Colombia FlagIn letter from three Colombian organizations to the Chairman of the World Health Organization (WHO) 2016 Consultative Expert Working Group on Research and Development: Financing and Coordination (CEWG) (posted on the info.justice.org blog), the organizations informed the CEWG of efforts to secure a compulsory license for Imatinib, marketed by Novartis as Gleevec® or Glivec, and resistance to those efforts.  The three Colombian organization signatories consisted of the IFARMA Foundation, Misión Salud, and CIMUN.

    The organizations noted that since November 2014, the group had been encouraging the Ministry of Health (MOH) of Colombia to declare access to Imatinib to be of public interest with the goal of securing a compulsory license.  While noting that the MOH had acknowledged that access to Imatinib is a matter of public interest, the groups also noted that efforts at securing a compulsory license had been met with resistance.  The group pointed to "enormous pressure from developed countries, from Big Pharma and even from Colombian trade authorities trying to block the Public interest declaration and the Compulsory license," suggesting that the resistance "combines inaccuracies, distortions of international trade rules and even threats of trade claims under the dispute settlement mechanism."

    The organizations state that "[w]e are conscious that efforts to reach the prevalence of health needs over commercial interests begin with the full use of TRIPS flexibilities," but add that "we feel that any efforts to move to a global system delinking monopoly prices from research and development investments could be perceived without sense when some countries impede the full use of TRIPS flexibilities with misleading arguments and methods."  The group concludes the letter with the hope that by informing the CEWG of the situation, it "would help to encourage Colombian process" on declaring a compulsory license for Imatinib.

  • Conference & CLE Calendar

    CalendarJune 15-17, 2016 - Fundamentals of Patent Prosecution 2016: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – New York, NY

    July 6-8, 2016 - Fundamentals of Patent Prosecution 2016: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

    June 9, 2016 – "Overcoming §103 Rejections for Biotech and Chemical Patents: Leveraging Recent Decisions and USPTO Guidance" (Strafford) – 1:00 to 2:30 pm (EDT)

    June 14, 2016 – "Patent Eligibility, Prior Art and Obviousness 2016: Current Trends in Sections 101, 102 and 103" (Practising Law Institute) – San Francisco, CA (also webcast)

    June 23, 2016 - Trade Secrets Seminar (Intellectual Property Law Association of Chicago) – Chicago, IL

    August 4-5, 2016 - Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

    August 8-9, 2016 - Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

    ***Patent Docs is a media partner of this conference or CLE

  • Chisum Patent Academy Patent Law Seminar

    The Chisum Patent Academy will be offering two sessions of its next Advanced Patent Law Seminar on August 4-5 and 8-9, 2016 in Seattle, WA.  The seminar is co-taught by Donald Chisum, author of the treatise Chisum on Patents (LexisNexis), and Janice Mueller, who was a tenured full Professor at the University of Pittsburgh School of Law from 2004-2011.  The registration fee for each seminar is $1,500; a maximum of ten registrations will be accepted for each seminar.  Those interested in registering for either seminar can do so here.  Additional information regarding the seminar can be obtained here or by e-mailing info@chisum.com.

    Chisum Patent Academy

  • Subject Matter Eligibility Guidance — Example on Screening for Gene Alterations

    By Donald Zuhn –-

    USPTO SealLast month, the U.S. Patent and Trademark Office issued further guidance for determining subject matter eligibility under 35 U.S.C. § 101.  In addition to a memorandum on subject matter eligibility determinations that was issued to the patent examining corps, an updated list of court decisions (Supreme Court and Federal Circuit) addressing subject matter eligibility, and an updated index of eligibility examples, that guidance provided six additional life sciences examples numbered 28-33 (33 being the total number of examples that the Office has issued to date).

    We previously discussed Example 29, which concerns exemplary claims directed to the diagnosis and treatment of the hypothetical disease julitis.  Today, we discuss Example 31, which includes five claims directed to methods for screening for an alteration of a BRCA1 gene, hybridizing BRCA1 sequences, or amplifying BRCA1 sequences.  The example notes that the five claims include one actual claim (claim 1) from U.S. Patent No. 5,753,441, and four hypothetical claims (claims 70, 75, 80, and 85) modeled after the technology described in the '441 patent.  The example also notes that claim 1 was found to be patent ineligible in Association for Molecular Pathology v. U.S. Patent and Trademark Office (Fed. Cir. 2012).

    In the example, applicant has discovered the "wild-type" sequence of the human BRCA1 gene and naturally occurring alterations from this sequence that are correlated with an increased likelihood of developing breast or ovarian cancer, and applicant has disclosed methods of screening patients for alterations in the BRCA1 gene by comparing a patient's BRCA1 sequence with the wild-type BRCA1 sequence.  The example notes that at the time applicant's application was filed, DNA sequences were routinely compared by either hybridizing two different DNA molecules and detecting whether the sequences form a hybridization product, or by amplifying a portion of a DNA molecule and then sequencing the amplification product.  The example also notes that at the time applicant's application was filed, the technique of Scanning Near-field Optical Microscopy (SNOM) was not commonly or routinely used by scientists to study DNA hybridization (even though the use of this technique to study hybridization had been discussed in several articles in widely-read scientific journals).  The example further notes that at the time applicant's application was filed, the hypothetical technique of Cool-Melt polymerase chain reaction (Cool-Melt PCR) was not conventionally used to amplify mutant nucleic acids (even though this technique became a standard laboratory technique for amplifying mutant nucleic acids several years after the application was filed).

    The five claims presented in Example 31 are as follows:

    1.  A method for screening germline of a human subject for an alteration of a BRCA1 gene which comprises comparing germline sequence of a BRCA1 gene or BRCA1 RNA from a tissue sample from said subject or a sequence of BRCA1 cDNA made from mRNA from said sample with germline sequences of wild-type BRCA1 gene, wild-type BRCA1 RNA or wild-type BRCA1 cDNA, wherein a difference in the sequence of the BRCA1 gene, BRCA1 RNA or BRCA1 cDNA of the subject from wild-type indicates an alteration in the BRCA1 gene in said subject.

    70.  The method of claim 1, wherein said comparing BRCA1 sequences further comprises:
        hybridizing a wild-type probe to a BRCA1 gene isolated from said sample; and
        detecting the presence of a hybridization product by measuring conformational changes in the probe that are indicative of hybridization to the BRCA1 gene with scanning near-field optical microscopy.

    75.  A method for hybridizing BRCA1 sequences comprising:
        hybridizing a wild-type probe to a BRCA1 gene isolated from a tissue sample from a human subject; and
        detecting the presence of a hybridization product by measuring conformational changes in the probe that are indicative of hybridization to the BRCA1 gene with scanning near-field optical microscopy.

    80.  The method of claim 1, wherein said comparing BRCA1 sequences further comprises:
        amplifying by Cool-Melt PCR all or part of a BRCA1 gene from said sample using a set of primers to produce amplified nucleic acids; and
        sequencing the amplified nucleic acids.

    85.  A method for amplifying BRCA1 sequences comprising:
        amplifying by Cool-Melt PCR all or part of a BRCA1 gene from a tissue sample from a human subject using a set of primers to produce amplified nucleic acids; and
        sequencing the amplified nucleic acids.

    According to the example, all of the claims but claim 1 are considered to be patent eligible.

    In analyzing the claims presented in Example 31, the Office explains that claim 1 is directed to an abstract idea because "it is apparent that the step of comparing [recited in the claim] could be performed by a human using mental steps or basic critical thinking," adding that "[s]imilar mental processes have been held by the courts to be abstract ideas."  The Office further explains that apart from the single step of comparing and the wherein clause (which are identified in the example as the abstract idea), there are no other elements/steps recited in the claim.  Because "the claim as a whole does not amount to significantly more than the abstract idea of comparing information," the Office concludes that claim 1 is not patent eligible.

    With respect to claims 70 and 80, the Office explains that because both claims depend from claim 1 and incorporate the comparing step of claim 1, claims 70 and 80 are directed to a judicial exception.  However, the Office also explains that both claims recite additional elements that "yield[] a claim as a whole that is significantly more than the judicial exception itself."  In particular, claim 70 recites a detecting step that uses a technique (i.e., SNOM) that while known to scientists at the time the application was filed, was not "actually routinely or conventionally used by scientists . . . to detect DNA hybridization," and therefore "distinguishes claim 70 from well-understood, routine and conventional methods of detecting DNA hybridization such as autoradiography."  Similarly, claim 80 recites an amplification step using a technique (i.e., Cool Melt PCR) that "was used by a few scientists in the field to amplify nucleic acids at the time the invention was made and the application was filed," but was not "actually routinely or conventionally used by scientists in this field at the time the invention was made and the application was filed."  The example notes that "use [of either technique] by only a few scientists does not make the technique routine or conventional in the field as a whole."  Thus, claims 70 and 80 are found to be patent eligible.

    With respect to claims 75 and 85, the Office explains that neither claim includes steps that "recite or describe any recognized exception."  In particular, claim 75 recites a hybridizing step and a detecting step and claim 85 recites an amplifying step and a sequencing step.  Because neither claim 75 nor claim 85 contains steps that recite of describe any recognized exception, the Office notes that the analysis of these claims ends with eligibility at Step 2A, and that the Step 2B analysis does not need to be performed.

    Patent Docs will provide summaries of other life sciences examples in subsequent posts.

  • Mobile Telecommunications Technologies, LLC v. Blackberry Corp. (N.D. Tex. 2016)

    Electronic Delivery of Messages Equated to U.S. Post Office Services

    By Joseph Herndon —

    N.D. TexasOn May 12, the U.S. District Court for the Northern District of Texas issued an Order in a case captioned Mobile Telecommunications Technologies, LLC v. Blackberry Corp. involving BlackBerry's motion for Summary Judgment that asserted claims of U.S. Patent Nos. 5,809,428 and 5,894,506 are invalid under 35 U.S.C. § 101.

    More specifically, BlackBerry argued that claims 1 and 8 of the '428 Patent are directed to the abstract idea of sending and storing messages, and claim 8 of the '506 Patent is directed to the abstract idea of coded communication.  The District Court agreed, and equated the claims to delivering a package by a postal courier, and sending coded messages between soldiers in a battlefield.  The District Court's reasoning seems a bit far-fetched, but the outcome is not too surprising given the current state of U.S. patent law with respect to software claims and patent eligibility.

    The District Court applied the two-step test set for in Alice to first determine whether the claims at issue are directed to a patent-ineligible concept, such as an abstract idea.  If so, the court then determines whether the additional elements transform the nature of the claim into a patent-eligible application.

    Abstract Ideas

    Claims 1 and 8 of the '428 Patent are directed to utilizing a two-way communication network to process data messages that cannot be successfully transmitted from a network operations center ("NOC") to a mobile unit.  Claim 8 is representative and reproduced below.

    8.  In a two-way wireless communications system, a method of processing data messages that cannot be success fully transmitted from a network operations center to a wireless mobile unit comprising the steps of:
        (a) transmitting a data message from the network operations center to the mobile unit;
        (b) receiving at the network operations center a data acknowledgment message from the mobile unit acknowledging receipt of the data message sent by the network operations center;
        (c) transmitting a probe message from the network operations center to the mobile unit if, after transmitting a data message to the mobile unit, no data acknowledgment message is received at the network operations center;
        (d) marking at the network operations center a data message as undelivered if, after transmitting a probe message to the mobile unit, no probe acknowledgment message is received at the network operations center; and
        (e) storing at the network operations center the undelivered data message.

    The District Court determined that the asserted claims of the '428 Patent are directed to the basic idea of sending and storing messages, which is not rooted in computer technology.  BlackBerry provided a hypothetical equating the claim functions to a courier attempting to deliver a package using the following steps:

    (a) a courier tries to deliver a package to a person's house;
    (b) if the person accepts delivery of the package, then the courier is informed that the package has been delivered;
    (c) if the person does not answer, then the courier tries to determine the person's current location by knocking on the back door, going to the person's work, or other places the person is known to visit;
    (d) if the person still does not answer, the courier marks the package to be stored in the undelivered mail bin; and
    (e) the courier then stores the undelivered package in the undelivered mail bin.

    The District Court was persuaded by this hypothetical in that the idea of sending and storing messages as described in the '428 Patent is an abstract idea directed to a routine task that could be performed by a human.

    Turning to the '506 patent, claim 8 describes an electronic messaging system that provides coded communications between messaging terminals.  In particular, the claim recognizes that many paging messages consist of a relatively small number of common phrases.  Thus, commonly used phrases can be treated as "canned" messages that can be replaced by short message codes.  A key of canned messages and message codes is stored in both the terminal devices and the NOC, and this allows a user to select a canned message and for the associated message code to be sent through the communications network to the mobile device.  When the mobile device receives the message code, then the corresponding canned message will be displayed to the user.

    The District Court determined that claim 8 of the '506 Patent is directed to a method for effectuating the abstract concept of coded communication.  BlackBerry provided an additional hypothetical of coded battlefield communications that persuaded the District Court and showed how the method of claim 8 of the '506 Patent could be performed by a human:

    (a) a battlefield operations center has a lookup table that contains messages and their associated codes;
    (b) two soldiers—soldier A and soldier B—each have a lookup table that contains messages and their associated codes;
    (c) soldier A wants to send a coded message to soldier B and thus selects a message from his lookup table;
    (d) soldier A determines the message code assigned to the selected message and sends the code using a message carrier to the battlefield operations center;
    (e) battlefield operations center relays the message code to soldier B;
    (f) soldier B uses the received message code and his lookup table to retrieve the message that soldier A sent; and
    (g) soldier B looks at the retrieved message.

    The practice of communicating using codes has been in existence for a long time, and the District Court thus concluded that coded communication is an abstract idea.

    Inventive Concepts

    Because the claims were found to be directed to abstract ideas, the District Court examined the elements of the claims to determine whether they contain an "inventive concept" sufficient to transform the claimed abstract idea into a patent-eligible application.

    The '428 Patent employs a NOC and "mobile units" to carry out the steps of sending and storing messages.  The District Court found those elements to be generic computer hardware components that do not add something significantly more as required to transform the abstract idea of sending and storing messages into a patent-eligible invention.  The District Court came to the same conclusion for the '506 Patent.

    Mobile Telecommunications (MTel) argued that the asserted claims of the '428 and '506 Patents are patentable because they claim a new and useful process for communication.  According to MTel, claims 1 and 8 of the '428 Patent proposed a novel solution to the problem of losing data messages when an initial delivery attempt fails, by sending a probe message which saves capacity.  Similarly, MTel argued claim 8 of the '506 Patent offered a new solution to a problem encountered on wireless networks by transmitting compressed messages.

    The District Court noted that "novelty" of the claimed invention is not the proper focus of the § 101 inquiry.

    MTel also argued that the patents address a needed improvement in electronic messaging technology, which cannot be accomplished solely with human activity.  But the District Court found that the asserted claims do not solve problems specifically arising in the realm of computer networks, and that technology did not create the problems addressed.  Further, the District Court found that the asserted claims do not specify how interactions with the two-way wireless network are manipulated to yield a desired result.

    It is interesting to compare this Texas District Court decision with another recent decision captioned Sophos Inc. v. RPOST Holding, Inc. (U.S. District Court for the District of Massachusetts), in which patents directed to electronic delivery and verification of messages were found to satisfy 35 U.S.C. § 101.  Four patents are in-suit, and Sophos argued that the patents-in-suit are invalid because they claim unpatentable abstract ideas characterized as the electronic equivalent of certified mail, the concept of notifying the sender that a message was successfully delivered, the concept of notification when the certified message was not successfully delivered, and the concept of using a communication system or language when delivering certified mail.  Even though the patents do not claim any algorithm certifying the delivery of email, the District Court in Massachusetts found the claims to satisfy § 101 because they provide proof of delivery and content; a task that the United States Postal Service cannot do.  The District Court also found the claims to recite an inventive concept by including an intermediate server between the sender and receiver of an electronic message to address the problem of providing reliable proof of the content and delivery of electronic messages, without requiring the cooperation of the recipient and without requiring special email software.

    Mobile Telecommunications Technologies, LLC v. Blackberry Corp. (N.D. Tex. 2016)
    Memorandum Opinion and Order by Chief Judge Barbara M. G. Lynn

  • Bloomberg/BNA Releases Report on Biopharma IPRs

    By Kevin E. Noonan —

    BIO International Convention_shortAs part of a session on the effects of inter partes review on biopharma patents presented today at the 2016 BIO International Convention, Bloomberg/BNA released a report on more than 300 biopharma patents that have been subject to IPRs since they became available in September 2012.  (The substance of this session will be reported in a later post.)  Reported by W. Randy Kubetin, Life Science Review project leader for BNA, the study (written by John Aquino) presented the views of patent lawyers, other observers and industry leaders on the process.  While interesting, the value of the report stems from its statistics.

    Bloomberg BNAThe total number of IPR requests filed for biopharma patents has increased over the years since they became available, as summarized below:

    Biopharma IPR Petitions Filed:

    2012-2013    42

    2014            108

    2015            184

    2016            140 (proj.)

    The outcome of pretrial dispositions of biopharma IPR Petitions filed in 2014-2015 are:

    2014:

    46% granted (50)

    23% settled before grant (25)

    31% denied (33)

    2015:

    33% granted (61)

    26% settled before grant (47)

    30% denied (55)

    10% pending (19)

    And for decisions for IPRs decided on petitions filed in 2014, the following statistics are reported:

    Decisions: 2014

    56% decided (28)

    20% settled after grant (10)

    20% pending (10)

    4% patent owner request for adverse ruling (2)

    Judgments: 2014

    57% in favor of patent owner/all claims (16)

    39% in favor of petitioner/all claims (11)

    4% some claims invalidated (1)

    While these numbers show some hopeful trends, Hans Sauer, BIO VP for Intellectual Property, pointed out that patentees remain at risk of having their patents invalidated from individuals of all motivations, who are not at risk of infringement liability and at times well before there could be any chance for getting a reasonable chance for return on investment.  This is a fair question that points out the inconsistencies in a law passed by Congress to address a problem that for most biopharma patents does not exist, and that provides for any member of the public a vehicle for harassing patent owners for the lifetime of their patents (and for patents that continue to have value throughout their term).  While these statistics show a hopeful trend it will take much more time (and risk to many more biopharma patents) for the effects of IPRs on the biopharma industry to become apparent.

  • BIO International Convention 2016 Preview

    U.S. Patent Practice – the PTAB, Federal Courts, and Patent Eligibility

    By Andrew Williams —

    BIO International ConventionThe 2016 BIO International Convention has already begun in San Francisco, but most of the sessions and forums get underway beginning on Tuesday, June 7, 2016.  Patent Docs has been highlighting a few sessions or other opportunities, in thematic fashion, to help you navigate your way through the convention.  For example, today, we focus on issues surrounding the use of inter partes reviews ("IPRs") at the Patent Trial and Appeal Board ("PTAB"), and on issues surrounding patent eligibility for biotechnology inventions.  Of course, Patent Docs authors and contributors will be present at BIO as part of the MBHB contingent, and Patent Docs readers are encouraged to stop by the MBHB booth (#504) to discuss these sessions (or whatever other topic is of interest to you).

    In the past three and a half years, IPR proceedings have been available for accused infringers, and just about anyone else, to challenge issued patents at the PTAB.  Not surprisingly, their use has been a popular topic at recent BIO conventions.  This year is no exception.  First up in the Intellectual Property track is "Will the PTAB be a Road Block for Biotech? Lessons Learned from the First Three Years of Inter-Partes Review and Future Prospects."  This session will take place at 2:15 PM on June 7 in Room West 3008.  The description for the session notes that the PTAB has been invalidating claims and entire patents with a frequency that is alarming to those relying on patent protection in the Biotech space.  Of course, most affected patents are in other fields, but this does not mean that biotech and pharma are being ignored.  The panel will explore the various practices established by the PTAB, including claim construction and claim amendment practice, and the recent proposals for change to these procedures.  In addition, the session will explore the intersection of PTAB and the BPCIA to see how IPRs are being used in the biosimilar context.  The speakers on the panel are Teresa Stanek Rea, partner at Crowell & Moring LLP, former Acting Under Secretary of Commerce for Intellectual Property and former Acting Director of the U.S. Patent and Trademark Office; Michael Tierney, Lead Administrative Patent Judge at the PTAB, and Kevin Noonan, partner at McDonnell Boehnen Hulbert & Berghoff LLP (and Patent Docs co-author).  The session will be moderated by William Kubetin, Managing Editor of Bloomberg BNA.

    The Intellectual Property track has a second session that will address the issues of the PTAB and the BPCIA, but will also include issues related to the Hatch-Waxman statute.  This session, entitled "Piecing Together the Hatch-Waxman, BPCIA and PTAB Puzzle: Revealing the Big Picture in Patent Challenges Brought in Multiple Fora," will take place in Room West 3008 at 3:30 PM on June 7, 2016.  The description of this session notes that in 2015, there was a sizable increase in the number of IPR challenges to pharmaceutical and biotechnology patents.  At least a part of this rise stems from the use of IPRs by generic drug companies and those preparing biosimilar drugs.  IPRs can be seen as a parallel to district court litigation under the Hatch-Waxman Statute and as an alternative to the "patent dance" under the BPCIA.  The session was "[d]esigned for corporate decision makers and practicing IP professionals," and promises to address the interplay between the PTAB and district court.  The speakers for this session are Claire Vasios, Vice President of Intellectual Property for Alkermes Inc. and Lori Wolfe, Associate General Counsel, Specialty IP Litigation for Teva Pharmaceuticals USA, Inc.  The session will be moderated by Nicholas Mitrostas of Goodwin Proctor.

    A final session we will highlight in the Intellectual Property track will address how the Patent Office and U.S. Court system has been handling patent eligibility issues for biotechnology inventions.  Entitled "Protecting Biomedical Innovation in a Shifting Patent-Eligibility Landscape," this session will take at 2:15 PM on June 8 in Room West 3008.  The description of the session notes that the patent eligibility doctrine is not new, but that the Patent Office and Supreme Court have recently been invoking it to deny patent protection for otherwise "breakthrough" inventions.  The judicially created subject matter exceptions of abstract ideas, laws of nature and natural phenomena are being used to exclude patents that are new and not obvious over the prior art.  The panel promises to "discuss how stakeholders can maneuver the still-changing landscape in this challenging area and where it may be heading moving forward."  The speakers on this panel include Robert Armitage, Consultant on IP strategy and policy matters (and former Senior Vice President and General Counsel at Eli Lilly and Company); Robert Bahr, Deputy Commissioner for Patent Examination Policy at the U.S. Patent Office, Gerard Devlin, Managing Counsel for IP Litigation, Office of General Counsel at Merck & Co., Inc., and Arthur Gajarsa, retired Federal Circuit Judge currently at Wilmer Hale.  The session will be moderated by Teige Sheehan of Heslin Rothenberg Farley & Mesiti, P.C.

    We look forward to seeing you this week at BIO 2016.

  • Court Report

            By Sherri Oslick —

    Gavel About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases.

    Orexo AB et al. v. Actavis Elizabeth LLC et al.
    1:16-cv-00397; filed May 27, 2016 in the District Court of Delaware

    • Plaintiffs:  Orexo AB; Orexo US, Inc.
    • Defendants:  Actavis Elizabeth LLC; Actavis Inc.

    Infringement of U.S. Patent No. 9,259,421 ("Abuse-Resistant Pharmaceutical Composition for the Treatment of Opioid Dependencen" issued February 16, 2016) following a Paragraph IV certification as part of Actavis' amendment of its ANDA to manufacture a generic version of Orexo's Zubsolv® (buprenorphine hydrochloride and naloxone hydrochloride sublingual tablets, used the maintenance treatment of opioid dependence and for the induction of buprenorphine maintenance therapy in patients suffering from opioid dependence).  View the complaint here.


    Alvogen Pine Brook LLC v. Noven Pharmaceuticals, Inc. et al.
    1:16-cv-00395; filed May 27, 2016 in the District Court of Delaware

    • Plaintiff:  Alvogen Pine Brook LLC
    • Defendants:  Noven Pharmaceuticals, Inc.; Hisamitsu Pharmaceutical Co., Inc.

    Declaratory judgment of noninfringement of U.S. Patent Nos. 6,841,716 ("Patch," issued January 11, 2005) and 8,231,906 ("Transdermal Estrogen Device and Delivery," issued July 31, 2012) based on Alvogen's filing of an ANDA to manufacture a generic version of Noven's Minivelle® (estradiol transdermal system, used for the treatment of moderate to severe vasomotor symptoms due to menopause and for the prevention of postmenopausal osteoporosis).  View the complaint here.


    AbbVie Inc. v. Amneal Pharmaceuticals, LLC et al.
    1:16-cv-00398; filed May 27, 2016 in the District Court of Delaware

    • Plaintiff:  AbbVie Inc.
    • Defendants:  Amneal Pharmaceuticals, LLC; Amneal Pharmaceuticals of New York, LLC

    Infringement of U.S. Patent Nos. 7,148,359 ("Polymorph of a Pharmaceutical," issued December 12, 2006) and 7,364,752 ("Solid Dispersion Pharmaceutical Formulations," issued April 29, 2008) following a Paragraph IV certification as part of Amneal's filing of an ANDA to manufacture a generic version of AbbVie's Norvir® (ritonavir, used to treat human immunodeficiency virus (HIV) infection).  View the complaint here.

  • Conference & CLE Calendar

    CalendarJune 6-9, 2016 - BIO International Convention (Biotechnology Innovation Organization) – San Francisco, CA

    June 7, 2016 – "Cuozzo Speed Technologies-Broadest Reasonable Interpretation: A Nonsensical Scenario" (Intellectual Property Law Association of Chicago Patent Committee) – Chicago, IL

    June 8, 2016 – "What's the Trick? Making Effective Use of Objective Evidence in IPRs, Patent Prosecution, and Litigation" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

    June 9, 2016 – "The Defend Trade Secrets Act of 2016: What You Need To Know" (American Law Institute) – 2:00 – 3:00 pm (Eastern)

    June 9, 2016 – "New EU Trade Secrets Directive: What Does It Mean for IP Owners?" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

    June 15-17, 2016 - Fundamentals of Patent Prosecution 2016: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – New York, NY

    July 6-8, 2016 - Fundamentals of Patent Prosecution 2016: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

    June 9, 2016 – "Overcoming §103 Rejections for Biotech and Chemical Patents: Leveraging Recent Decisions and USPTO Guidance" (Strafford) – 1:00 to 2:30 pm (EDT)

    June 14, 2016 – "Patent Eligibility, Prior Art and Obviousness 2016: Current Trends in Sections 101, 102 and 103" (Practising Law Institute) – San Francisco, CA (also webcast)

    June 23, 2016 - Trade Secrets Seminar (Intellectual Property Law Association of Chicago) – Chicago, IL

    ***Patent Docs is a media partner of this conference or CLE